The IBEX 35 opened higher on Friday, reclaiming the 18,000-point threshold as renewed optimism regarding peace negotiations between the United States and Iran bolstered sentiment, though caution lingered across trading floors amid conflicting signals from both parties.

With this uptick, the index was on track to close the week with a provisional gain of approximately 2.5%, which would mark its strongest weekly performance since the week ending April 10.

Markets once again clung to hopes of a favorable diplomatic outcome following comments from U.S. Secretary of State Marco Rubio, who acknowledged 'some good signs' in the talks aimed at ending the conflict, now entering its third month.

'Today, Europe could mirror some of the gains seen yesterday in New York following rumors that a final draft of the peace agreement may already be in place, though everything will depend on the news flow from the Middle East,' Bankinter analysts noted in their morning briefing.

'We are likely to see a more cautious tone in New York given the upcoming Memorial Day holiday on Monday,' they added.

However, skepticism remained palpable as Rubio also warned that any deal allowing Iran to impose a toll system in the strategic Strait of Hormuz would be unacceptable, while the Iranian Supreme Leader ordered that the country's near-weapons-grade enriched uranium not be sent abroad.

The nuclear issue and control of the Strait of Hormuz remain the primary stumbling blocks in the process. This is compounded by the recent memory of negotiations where hope has rapidly shifted to frustration over the deadlock seen in previous weeks.

In the commodities market, oil prices rose on Friday following a sharp decline in previous days, similarly driven by mixed messages regarding the Iran talks. Prices remain well above pre-conflict levels, with fears that they will stay elevated even if a deal is announced.

The prolonged energy disruptions threaten to spill over into global prices, leading traders to price in interest rate hikes in both developed and emerging economies.

In the debt market, bond yields showed relative calm on Friday after the broad-based rally seen earlier in the week, triggered by a shift in interest rate expectations. Markets are now pricing in potential hikes by the Federal Reserve before year-end, a sharp reversal from the two cuts expected prior to the start of the conflict.

On the macroeconomic agenda, the session offers two key data points: Germany's Ifo business climate index at 0800 GMT, and the University of Michigan consumer sentiment index in the U.S. -- which includes inflation expectations -- scheduled for 1400 GMT.

In the Spanish market, Puig stood out, remaining in an opening auction during the first minutes of the session with a significant drop expected once trading resumes, following news that the Spanish firm and Estée Lauder have abandoned merger talks.

Elsewhere in the banking sector, Santander rose 0.38%, BBVA gained 1.07%, Caixabank advanced 0.31%, Sabadell climbed 0.45%, Bankinter shed 0.21%, and Unicaja Banco edged up 0.22%.

Among non-financial heavyweights, Telefónica gained 0.64%, Inditex advanced 1.15%, Iberdrola slipped 0.05%, Cellnex rose 0.31%, and oil major Repsol fell 1.00%.

Overall, at 0705 GMT on Friday, Spain's benchmark IBEX 35 was up 82.70 points, or 0.46%, at 18,057.90 points, while the FTSE Eurofirst 300 index of leading European shares advanced 0.52%.

(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)